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1. Among the following groups: senior executives, junior executives, and students, which is the most likely to have the most and the least price elastic demand for membership in the Association of Business Professionals?

2. For the Grinch, a three percent increase in the price of ham leads to a two percent increase the quantity of green eggs he consumes. Are green eggs and ham substitutes or complements? Explain to me in words what happens when the price of ham goes up? What about the price of green eggs?

3. Sam's income elasticity of demand of ham is 1.4 and his income elasticity of demand for green eggs is -0.05. Which good is normal and which is inferior? Explain to me in words what happens to consumption when income increases?

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Anne Gillian Duero
Anne Gillian DueroLv10
28 Sep 2019

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Related questions

Answer the following questions:

If a 10% increase in the price of hamburgers leads to a decrease in the quantity demanded of hamburgers by 12%, what is the price elasticity of hamburgers? (Use the formula presented in the video: Episode 16: Elasticity of Demand)

https://www.youtube.com/watch?v=4oj_lnj6pXA&feature=youtu.be&list=PL336C870BEAD3B58B

The video, Episode 16: Characteristics that Determine Elasticity, presents 4 characteristics that determine how elastic the demand for a product is. List each of these. For each one, explain how the level of price elasticity is impacted by it. Does it make prices more or less elastic? Write a separate paragraph for each.

For each of the goods listed below, explain whether demand for it would be elastic or inelastic. Make sure to give specific reasons for your determination. Your discussion of Question 2 relates to this.

Eggs

Concert tickets

A packaged trip to Paris

Landline telephone service

Electricity in your home

A new car

The gasoline demand is inelastic and the demand for t-shirts is elastic. Let us assume that Company A produces and sells gasoline and Company B produces and sells t-shirts.

Explain what happens to total revenue if Company A increases its prices.

Explain what happens to total revenue if Company B increases its price

(1) If a demand curve shifts to the left, then:
a) price would go up and quantity would go down
b) price would go down and quantity would go up
c) a lower price and quantity would result
d) a higher price and quantity would result

(2) Demand and supply curves are drawn assuming ceterisparibus.This means that:
a) economists ignore all assumptions
b) economists don't watch for the fallacy of false cause
c) changes will be proportional
d) all other things besides price and quantity are unchanged

(3) If steak and potatoes are complements, when the price ofsteakgoes up, the demand curve for potatoes:
a) shifts to the right
b) shifts to the left
c) stays the same
d) shifts to the right and then moves back

(4) Given that chicken and beef are substitute goods, if thepriceof chicken decreases substantially, there would be:
a) an increase in the demand for beef
b) a decrease in the demand for beef
c) a decrease in the quantity for beef demanded
d) no change in the demand for beef

(5) Every day for the past two years you've had ham and cheese onawhole wheat bagel for lunch at Bungalow Bob's BagelBoutique.However, the price of whole wheat bagels has risen by 10cents sotoday you decide to have ham and cheese on rye bagel. Inthis case,whole wheat and rye bagels are best considered:

a) superior goods
b) normal goods
c) substitute goods
d) complementary goods

(6) For most goods, purchases tend to rise with increases inbuyers'incomes and to fall with decreases in buyers' incomes. Suchgoodsare known as:

a) inferior goods
b) direct goods
c) normal goods
d) luxury goods

(7) Economists know that a particular good can be classified asaninferior good if a(n)______ increase in buyers' incomecausesa(n)_____

a) increase; increase in demand
b) increase; increase in quantity demanded
c) increase; decrease in demand
d) decrease; decrease in demand

(8) An increase in the demand for medical services caused byanincrease in the number of people 65 is most likely attributabletowhich demand shifter?

a) income
b) consumer preferences
c) prices of other goods
d) demographic characteristics

(9) Which of the following would shift the demand curve fornewtextbooks to the right?

a) a decrease in the price of paper
b) a fall in the price of used textbooks
c) an increase in college enrollments
d) a fall in the price of new textbooks

(10) How a supply curve is sloped and located depends on:

a) technology
b) resources prices
c) the number of producers or sellers
d) all of the above

(11) A decrease in supply means:

a) a shift to the left of the entire supply curve
b) moving downward (to the left) along the supply curve withlowerprices
c) less will be demanded at every price
d) more will be supplied at every price

Ch. 6: Simple Pricing

a. define the Law of Demand?

b. Explain the distinction between a change in demand and a change in quantity demanded?

c. create a demand curve from a simple demand schedule in Table 6.2?

d. determine the calculated values in a table such as Table 6.4?

e. Can you apply your understanding of Chapter 4s marginal analysis to pricing decisions in a price-making (versus price-taking) firm?

f. Can you explain in words what Own Price Elasticity, Cross-Price Elasticity, and Income Elasticity mean?

g. Given specific values for Own-Price Elasticity of Demand, can you determine whether demand for the good is elastic, inelastic, or unit elastic?

h. Given specific values for Cross-Price Elasticity, can you determine whether the two goods are substitutes or complements?

i. Given specific values for Income Elasticity, can you determine whether the good is a normal or inferior good?

j. Can you calculate each of these elasticities, such as in the homework?

k. Identify relatively elastic and inelastic demand curves?

l. List factors that may affect demand elasticity.

m. Indicate whether total revenue will increase or decrease as a result of a price change, depending on the demand elasticity?

The textbook used for this assignment is Managerial Economics, Froeb Chapters.

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